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Private Banks get Access to CEIB Data for Loan Verification


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Private lenders and all-India financial institutions (AIFIs), including the National Bank for Financing Infrastructure and Development (NaBFID), will now have access to data from the Central Economic Intelligence Bureau (CEIB). This move aligns them with public sector banks (PSBs), which have had similar access for years. The decision was finalized last month during a meeting between bankers and government officials, according to sources.

Key Role in High-Value Projects
Institutions like NaBFID, which finance large infrastructure projects, stand to benefit significantly from this development. “Having access to CEIB data will ensure better evaluation of borrowers and streamline financing for high-value projects,” said a source familiar with the matter.

This access will also help resolve challenges faced by law enforcement agencies when seeking account-related information from private and foreign banks during investigations.

Improved Decision-Making for Private Lenders
Private sector lenders had been requesting access to CEIB data to improve their verification process. The CEIB portal provides credible information on borrowers, their businesses, and financial status, enabling faster and more informed decision-making.

Previously, only PSBs could access the CEIB’s automated search portal, launched last year for verifying borrower antecedents and identifying non-performing assets (NPAs). Now, private lenders can also use this portal to obtain detailed verification reports.

CEIB’s Role in Bank Reforms
The Narendra Modi-led government has emphasized cleaning up banks’ books since 2015. PSBs were directed by the finance ministry to seek CEIB reports for loans, renewals, or NPAs of Rs 50 crore and above. This policy was reinforced in 2019.

To streamline the process, the CEIB introduced a uniform reporting format in August 2022 and advised PSBs to appoint nodal officers as single points of contact for communication.

Impact on Bank Performance
These measures have significantly improved the performance of PSBs. According to the Reserve Bank of India’s Financial Stability Report, the gross non-performing assets (GNPA) ratio of large borrowers in commercial banks has declined from 4.5% in March 2023 to 2.4% in September 2024.

PSBs also reported a record aggregate net profit of Rs 1.41 lakh crore in the financial year 2023-24, highlighting the effectiveness of reforms.

The inclusion of private lenders and AIFIs in the CEIB’s data access framework is expected to further strengthen the banking system and promote efficient lending practices.

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